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This query is : Resolved
15 May 2013
Sir can u explain leverages i.e operating leverages
CMA Ramesh Krishnan
(Expert)
15 May 2013
Operating leverage measures the company`s level of fixed costs relative to its variable costs A company with high degree of operating leverage has a larger ratio of fixed costs to variable costs, and as a result has a higher breakeven point.
Aditya KHaitan
(Expert)
15 May 2013
The operating leverage of a business is the ratio of the change in revenue to the change in operating income. It is a way to measure the movement (up & down ) of the businesses earnings in relation to sales. A business with higher operating leverage is riskier than an equivalent business with lower operating leverage.
02 July 2013
Yes I agree with both the experts
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